It may have changed with the latest patch, but in my case I found I needed a spare fife, (I had two castles and villages at the time), I had a +5 relaionship with him, a right to rule of 40, and I had to tell him he would be given land. I saved before the conversation, and tried each option, but also found there was an element of luck in it.
It did get easier as my RTR rose, sometimes even having a small negative relationship, and once I had 3 or 4 Lords, two more came to my castle, and my wife/minister said spare fifes attracted them.
Big problem I had though was when I had about 12 Lords, as each time I assigned a fife to a new one relations took a large hit wth most of the others! and they began to defect.